View from the other side of the desk.

Sitting in the barber’s chair this morning I got into a conversation with the young lady cutting my hair. Jane is 24 years old and taking advantage of the government’s 95% LTV mortgages to buy her first property. As with many property transactions, things are not going well. The property has been down valued and she is receiving conflicting information on whether or not the property is freehold or leasehold. These are not minor issues.

After many years experience I was, unfortunately, not surprised about the problems she was encountering. After asking a number of simple questions it quickly transpired that the property is leasehold with an option to buy the freehold. Neither the agent nor her solicitor had taken the time to explain this or confirmed Jane’s understanding if they had. Jane also had no idea of who was working for her.

Before our conversation Jane was acting under the belief that the estate agent and mortgage company’s surveyor are acting for her. She also believed that the solicitor was the “estate agents”. On asking, Jane was unable to tell me the name of the firm, let alone which individual is acting on her behalf. Once I explained that the agent works for the vendor and the surveyor works for the mortgage company, she was genuinely shocked. Likewise, Jane was shocked when I explained that the only person involved in the transaction, who is working on her behalf, is her solicitor.

Unfortunately, this is was not surprising to me. After over a decade of working as an agent, I have seen countless people, not just first time buyers, who have believed that the agent was working for them.

If the residential property industry is to improve its public image, then the issue of undereducated consumers must be addressed. However, this is not easy to do. When should the public be taught the essential information they need?

The obvious answer is at the beginning of the process. Should agents be legally obliged to run through a key facts style pre-presentation giving details out or registering applicants? This option falls flat on its face almost immediately. Imagine you live in a town with 20+ agents (not uncommon) and visit each to collect details on properties you would be required by law to listen to this presentation again and again. What about the millions of buyers that complete the entirety of their property searching online? They might see an agent at the viewing, but this is less than a 50/50 chance with vendors undertaking the majority of viewings.

What about teaching it in schools as part of a life skills class? This idea has merit when first considered, but is peppered with fairly major problems. The first of being ‘who would teach it?’. It would totally uneconomical and, as the husband of a teacher, there is already far too high a burden of responsibility on this profession which seems to involve them taking over the role of a parent to the children in their care, rather than just teach them.

Have the solicitors run through it? The better solicitors and conveyances already do this. However, there are far too many practitioners that do not want their clients to know that they are their only ally. This problem is exacerbated by the proliferation of estate agents up selling “their” solicitors to buyers. The agent is usually the point of contact, rather than the buyer liaising directly with their solicitor and with the larger firms a single licensed professional is often signing off large numbers of files that are prepared by non-qualified members of staff.

At mortgage stage? This idea works the best in theory. Mortgage arrangers and advisors already have to run through the key facts information and if a brief overview of the house buying process was ‘tacked on’ for appointments for first time buyers only, it would provide the information necessary and within a generation, the knowledge gap will have caught up.

But this does not overcome the biggest hurdle in educating buyers. Many of them are not interested until it is too late. Speaking from personal experience, after a number of years in the industry, I started taking the time to explain the house buying process to potential buyers. Most of the time I was greeted with a “shut up and give me the details” attitude.

Like with Jane’s purchase, there are no easy answers. Most conscientious property professionals and the wider public would agree that more needs to be done to inform people of the dynamics of a highly complicated process that more and more people in the UK are undertaking.

Ben Gilligan is currently studying Real Estate Managment at Anglia Ruskin University and has over 10 years residential estate agency experience.


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